Traders on the floor of the NYSE, June 29, 2022.
Source: NYSE
Here are the most important news items that investors need to start their trading day:
1. Stock slump persists
U.S. investors returned from the three-day July Fourth holiday weekend to find stock futures down yet again. The market wrapped up its worst first half in more than 50 years last week, but the second half isn’t shaping up to look so rosy, either, at least not in its early days. Earnings season is just around the corner, too, which could mean even more down times ahead, as companies grapple with the impact of inflation on their bottom lines.
2. Eyes on China
Chinese Vice Premier Liu He represented his country in the signing of a trade agreement with the U.S. in January 2020.C
Saul Loeb | AFP | Getty Images
U.S. Treasury Secretary Janet Yellen on Tuesday held virtual talks with Chinese Vice Premier Liu He to address macroeconomic conditions, including U.S. sanctions and tariffs on China. President Joe Biden has suggested the U.S. could drop some Trump-era levies on Chinese goods. The officials also talked about stubborn supply chain problems, several of which stem from parts of China that have been under pandemic lockdowns. Several Chinese cities and regions have ramped up Covid restrictions in recent days, indicating the economic impact of the disease on the world’s second-largest economy is far from settled.
3. Euro hits two-decade low
Christine Lagarde, President of the European Central Bank. The central bank scheduled an emergency meeting to address higher bond yields.
John Thys | Afp | Getty Images
There is no sign of relief in the euro zone. Russia has made significant gains in Ukraine, and the war will rage on for a while, which means European consumers will continue to feel the crunch from elevated prices for goods and energy. Investor confidence in the euro zone has also fallen to a level last seen early in the Covid pandemic. All of this has translated into historic weakness for the euro, which fell to a 20-year low against the dollar Tuesday. The European Central Bank is set to raise rates for the first time in 11 years this month.
4. Russian gas squeeze
An employee of Uniper Energy Storage inspects the above-ground facilities of a natural gas storage facility at the Uniper Energy Storage facility in Bierwang, southern Germany on June 10, 2022.
Lennart Preiss | AFP | Getty Images
Some of Europe’s greatest fears about energy are playing out, as countries work to stockpile natural gas. As Russia prepares to shut down a major gas pipeline into Germany for maintenance, officials are worried Vladimir Putin’s government could keep the taps off for longer than the July 11-21 period. Some think Russia could cut off Europe for good as nations there continue to support Ukraine’s defense. “We cannot rule out the possibility that gas transport will not be resumed afterwards for political reasons,” the head of Germany’s energy regulator told CNBC.
5. Another crypto casualty
A cryptocurrency price crash and the onset of a new so-called “crypto winter” has left many companies in the industry facing a liquidity crisis.
Artur Widak | Nurphoto | Getty Images
“Crypto winter” is getting harsher. Vauld, a crypto lender backed by Peter Thiel and Coinbase, halted withdrawals, trades and deposits Monday. The Singapore-based company also said it is considering options for restructuring. Vauld also said it is talking to prospective investors, less than three weeks after its CEO said the company was operating normally despite strife in the crypto space. The news came as bitcoin and crypto firms take a beating against a backdrop of a wider rout in equities and bond markets.
– CNBC’s Evelyn Cheng, Elliot Smith and Arjun Kharpal contributed to this report.
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